Originally posted by @Mike Dymski:
@Jack B. Hey Jack. Bonnie is likely taking the same funds (or $0) that she would use to buy 4 homes and using it to purchase 400 apartment units and getting a large chunk of the equity in those apartment units (along with getting other compensation/fees).
Yes, you can use private money to purchase 400 SFRs as well. She is suggesting that it is significantly more efficient to do that with an apartment complex or two rather than 400 separate properties.
Bonnie is likely being conscientious of BP protocol in not replying with information that would appear to advocate her business or violate capital raising rules. Syndicators/sponsors add to their private investor network through many channels, one of which is networking on BP. Passive investors also use BP to find and vet deal syndicators/sponsors.
So I got a little curious, and decided to look around a little bit. Right on Bonnie's website, they state that they are Paid Students of Brad Sumrok Professional Mentoring. Like I said, there's nothing wrong with someone wanting to drop $25,000 or more to get an education from someone, but if you look around on BP a little bit, you'll see pretty quickly that Mr. Sumrok is a successful syndicator in the DFW area, and hosts seminars a couple of times a year which his members do get referral fees for getting people to attend. (Again, I'm not saying there's anything wrong with any of this - but I tend to get suspicious when I find these things out on my own, rather than being told by the person involved.)
It looks like his program is pretty well reviewed, but there's one thing I really, really don't like about it: they charge a $5,000 membership fee to anyone who wants to invest with them, even passively. I'm obviously not an expert on this particular program, and many people probably fee this money is well spent, but again - I don't like having to find out these things on my own.
From the posts I was reading, they have investment minimums around $100,00 as well (again, not uncommon at all.)
More to your point: I would never, in a bajillion years, invest in a deal the syndicator didn't have their own money in. I also wouldn't invest with someone who had to borrow the money to do the groundwork on a syndication deal (i.e. a brand new person with no money of their own. I actually can't think of anyone I would want to invest with less than that.) Even if you can do an entire MF deal with OPM (and I hate that term) you'll still need to cover the hard costs to put the deal together, which might push six figures depending on the deal.
There's no BP "protocol" against pitching seminars, gurus, networks, or anything else - I think she just knows how gurus and seminars are viewed around here, and hiding those associations just makes people even more wary. Maybe I'm just paranoid, but the fact that her BP profile says nothing about her association with Mr. Sumrok, along with her apparent reluctance to disclose what seminar she wants to refer people to, combined with (in my experience) the practice of charging people an access fee to be considered as passive investors for syndicated deals....I'd advise anyone getting involved with this to evaluate other options as well.
But for all I know, Mr. Sumrok's organization is top-notch, and I'm an idiot for not investing with them right now. I could also be completely misunderstanding the BP posts/comments I've read from other Brad Sumrok Investors and Students, so feel free to correct me if that's the case. I'm just trying to make the newer folks (of whom there are quite a few right now) aware of the risks associated with paid mentorship/group programs. I obviously just feel as if people should invest on a small scale on their own (or with a partner for a deal or two) before getting involved in large MF syndication. To each their own.
